What Are Interim Payments in Construction?
Construction projects last between six to 12 months. Several professionals have a hand in building a new single-family home or multi-unit structure. It involves electricians, roofers, and painters. Sometimes owner-builders and investors hire a contractor who oversees the entire project. Then, the contractor ensures that all subcontractors receive payment for their work.
Since construction projects take between six to 12 months, everyone involved expects to receive payments to help them keep their cash flow flowing. Contractors double as project managers. Thus, they disperse interim payments to subcontractors.
Mortgage House is among the lenders that issue construction loans to owner-builders and investors. Our loan specialists examine the applicant’s plans to ensure that they meet all the requirements for the funding. Keep in mind that it takes a few extra weeks to process construction loan applications. Loan specialists must establish a timeline and milestones. They write the information into the loan contract to keep everyone on the same page.
Interim payments encourage construction crews to build high-quality homes and multi-unit structures. If the lender finds that any stage of the project is not up to par, they can reject the payment request.
Once owner-builders and investors become Mortgage House clients, they receive access to our other loan products and discounts. For example, you can enjoy our Mortgage House car loan benefits.
Interim Payments and Construction Projects Conclusion
Interim payments and progress payments are similar in construction projects. Owner-builders and investors must pay their construction team in increments so that they will continue working. To discuss the details, contact our Mortgage House loan specialists.